Bird overstated the revenue it received from its shared electric scooters for at least two years, the company admitted in documents filed (PDF) with the US Securities and Exchange Commission Monday.
The phantom revenue was discovered after an audit of financial statements from 2020 and 2021 in which Bird found it was counting as revenue customers’ preloaded “wallet” balances following the completion of certain scooter trips. This revenue “should not have been recorded,” the company said.
As a result, Bird said that two years’ worth of financial statements “should no longer be relied upon” and that the company would be late in filing its third quarter earnings report, which was expected later today. A spokesperson for the company did not immediately respond to a request for comment.
Bird said its financial statements “should no longer be relied upon”
It was the latest misstep by the cash-strapped micromobility pioneer, which is widely credited for helping kick off the scooter-sharing boom in 2017. Last month, Bird said it was pulling its scooters out of three European countries — Germany, Sweden, and Norway — as well as “several dozen” small and mid-size cities in the US, Europe, the Middle East, and Africa. And earlier this year, Bird laid off nearly a quarter of its staff.
The news also comes on the heels of a massive shake-up at Bird that saw the company’s founder and CEO, Travis VanderZanden, replaced by president and chief operating officer Shane Torchiana. (VanderZanden remains chair of the board.) Several other executives have left in recent months as the company’s financial outlook continues to worsen. In June, the New York Stock Exchange warned Bird it was at risk of being delisted if its stock continued to trade under $1.
Bird said it would correct its financial reports “as soon as practicable” but that a broader review of its disclosure practices would be necessary.
“Management has concluded that the Company’s disclosure controls and procedures are not effective at a reasonable assurance level, due to a material weakness in its internal control over financial reporting related to the ineffective design of controls around its business systems that resulted in the recording of revenue for uncollected balances following the completion of certain Rides that should not have been recorded,” Bird said in its report. “The Company is in the process of designing and implementing controls to remediate these deficiencies.”